Prop. 13 stays intact, at least for now

The time hasn’t arrived for the California courts to revisit Proposition 13 and its revolutionary impact on state taxes. That’s the word from an appeals court, which says the state’s highest court settled the issue in 1978. But opponents aren’t giving up.

Thirty-four years after the voters clamped a lid on local property taxes and placed large barriers in the way of any replacement revenues, Prop. 13 is being challenged again. The plaintiff is Charles Young, former chancellor at UCLA, which like schools at all levels has seen a steady drop in state funding in the last few decades. Represented by some prominent attorneys, Young wants the courts to overturn one of Prop. 13′s core provisions, a requirement of two-thirds approval by each house of the Legislature for any increase in state taxes.

The provision has enabled a united front of tax-resistant Republicans to block all increases in state levies, and it’s forced Gov. Jerry Brown to resort to a November ballot initiative for his proposed boost in sales taxes and in income taxes for the wealthy, which he says is needed to stave off drastic budget cuts. According to Young’s lawsuit, the shift from a majority to a two-thirds voting requirement was such a fundamental change in the structure of state government — not merely in its revenues, but in the ability of the legislative branch to set tax rates — that it amounted to a revision of the state Constitution. A constitutional revision can be placed on the ballot only by the Legislature itself or by a new constitutional convention, and not by a voter initiative like Prop. 13.

It’s the same argument that the state Supreme Court considered and rejected when it upheld Proposition 8, the 2008 initiative that banned same-sex marriage in California. Federal courts have since declared Prop. 8 unconstitutional as a denial of equal protection, and the case could be headed to the U.S. Supreme Court. The first appellate court to review Young’s lawsuit gave short shrift to his case against Prop. 13.

According to Tuesday’s ruling by the Second District Court of Appeal in Los Angeles, the issue was resolved when the state Supreme Court upheld Prop. 13 less than four months after it passed. One claim the court unanimously rejected in that ruling was an argument that the measure was a constitutional revision rather than an amendment. As the justices put it in 1978, the initiative power can be used to enact “a new system of taxation which may provide substantial tax relief for our citizens.” Although that portion of the decision didn’t directly address the two-thirds vote requirement, it applied to all of Prop. 13 and forecloses Young’s current suit, the appeals court said in a brief 3-0 ruling.

The decision was praised by the Pacific Legal Foundation, one of several conservative groups that had urged the court to toss the new lawsuit. The ruling reaffirms “the integrity of the initiative process and the electorate’s right to pull rank on the Legislature when it comes to important issues of taxation,” said Harold Johnson, a lawyer for the foundation.

But Rex Heinke, a lawyer for Young, said it’s time for the state Supreme Court to take another look at the issue.

“We believe that there has been a fundamental change (in state government) by adoption of the two-thirds rule,” Heinke said. ”There is a clear constitutional provision for revising the state Constitution, and it wasn’t followed here.”